Acquired LiveAreaLabs (LAL), a digital creative agency, strengthening PFSweb's agency service offering and adding support capabilities for hybris, Magento, WebSphere and other leading platforms

Launched new eCommerce solutions for Urban Decay and Canada Goose, as well as the soft launch of the United States Mint website (officially launched October 1, 2014)

First Nine Months of 2014 Financial Summary

Service fee equivalent revenue increased 8% to $89.6 million compared to $83.2 million in the same period of 2013

Adjusted EBITDA remained flat at $6.8 million compared to the same period of 2013

Third Quarter 2014 Financial Results DetailsTotal revenues in the third quarter of 2014 increased 7% to $57.1 million compared to $53.6 million in the same period of 2013. Service fee revenue in the third quarter of 2014 increased 31% to $31.4 million compared to $23.9 million last year. This increase was primarily due to new client programs launched in the third quarter of 2014 and increased project revenue. Product revenue decreased to $17.3 million compared to $21.5 million in the same period of 2013, primarily due to ongoing restructuring activities by the company's largest client in this segment.

Service fee equivalent revenue in the third quarter of 2014 increased 28% to $32.4 million compared to $25.2 million in the same period of 2013. Excluding the results of the REV and LAL acquisitions, which occurred in September, third quarter service fee equivalent revenue grew by 24% to $31.2 million compared to the same period in 2013.

Service fee gross margin in the third quarter decreased to 29.9% compared to 32.3% in the same period in 2013. While each period includes the benefit of higher margin project activity, the 2014 period includes certain incremental expenses incurred to prepare the operations for the upcoming holiday volume.

Adjusted EBITDA was $2.9 million in the third quarter of 2014 compared to $1.4 million in the same period in 2013.

Net loss in the third quarter of 2014 was $2.5 million or $(0.15) per diluted share, compared to a net loss of $2.0 million or $(0.12) per diluted share in the same period of 2013. Net loss in the third quarter of 2014 included approximately $0.9 million in stock-based compensation expense and $1.5 million in acquisition and restructuring related costs, compared to approximately $0.6 million in stock-based compensation expense and no acquisition or restructuring related costs in the same period of 2013.

Non-GAAP net loss (a non-GAAP measure defined below) in the third quarter of 2014 was $0.1 million or $(0.01) per diluted share, compared to non-GAAP net loss of $1.3 million or $(0.08) per diluted share in the third quarter of 2013.

Cash and cash equivalents decreased to $19.5 million compared to $22.4 million at December 31, 2013, primarily due to the acquisitions of REV and LAL. Debt was $11.3 million at September 30, 2014 compared to $11.1 million at December 31, 2013.

Management Commentary"The third quarter marked a significant turn for our organization, both strategically and financially," said Michael Willoughby, CEO of PFSweb. "We significantly enhanced our agency and technology service offerings with the acquisitions of REV Solutions and LiveAreaLabs. Both supplement our key partnership with Demandware, while broadening our integration capabilities with Oracle ATG, hybris, Magento and others.

"Our financial results this quarter also reflect our return to strong year-over-year growth in our eCommerce business, as we are now fully past last year's client transitions. This is reflected in our service fee equivalent revenue growth of 28% and adjusted EBITDA growth of 107%. In addition to the incremental benefit from the acquisitions, these results were strengthened by new and expanded client relationships with Urban Decay, which is the ninth L'Oreal Brand in our client portfolio, Canada Goose, and the rolling out of our highly anticipated United States Mint eCommerce solution.

"Looking ahead, we expect this momentum to carry into the holiday season and 2015, driven by continued execution internally and our growth-through-acquisition strategy to support additional software platforms and geographies across the globe. We will also pursue additional opportunities to onboard new clients and expand current client relationships as we fully integrate REV Solutions and LiveAreaLabs. In fact, we are already seeing new opportunities for client engagements that combine unique services from REV, LiveAreaLabs and PFSweb. These cross-selling opportunities are yet another avenue for expansion in our eCommerce service offering."

2014 and 2015 OutlookPFSweb reiterates its 2014 service fee equivalent revenue guidance to range between $131 million and $137 million, increasing 10% to 15% compared to 2013. The company also reiterates its outlook for 2014 adjusted EBITDA to range between $12 million and $14 million, representing an increase of 12% to 31% compared to 2013.

For 2015, PFSweb currently expects strong growth in service fee equivalent revenue and adjusted EBITDA as the company realizes a full year benefit from recent acquisitions and the United States Mint contract, as well as incremental revenue from future new and expanded client relationships. At this time, the company is targeting 2015 service fee equivalent revenue to range between $165 million and $175 million. The company is also targeting adjusted EBITDA as a percentage of service fee equivalent revenue to improve to a range between 10% and 11%. This adjusted EBITDA target includes the projected impact of incremental sales and marketing expenditures in 2015 to support the company's future revenue growth projections.

Conference CallPFSweb will conduct a conference call today at 11:00 a.m. Eastern time to discuss its results for the third quarter ended September 30, 2014.

The company's CEO Mike Willoughby and CFO Tom Madden will host the conference call, followed by a question and answer period.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

About PFSweb Inc.PFSweb (NASDAQ: PFSW) is global provider of end-to-end eCommerce solutions including digital agency and marketing services, technology development services, business process outsourcing services and a complete omni-channel technology ecosystem. The company provides these solutions and services to major brand names and other companies seeking to optimize every customer experience and enhance their traditional and online business channels. PFSweb supports organizations across various industries, including Procter & Gamble, L'Oreal, LEGO, Columbia Sportswear, Ricoh, Roots Canada Ltd., Diageo, BCBGMAXAZRIA, T.J. Maxx, the United States Mint, and many more. PFSweb is headquartered in Allen, TX with additional locations in Tennessee, Mississippi, Minnesota, Washington, New York, Canada, Belgium, India and the Philippines. For more information, please visit www.pfsweb.com or download the free PFSweb IR App on your iPhone, iPad or Android device.

Non-GAAP net income (loss) represents net income (loss) calculated in accordance with U.S. GAAP as adjusted for the impact of non-cash stock-based compensation expense, acquisition related costs and restructuring and other charges.

EBITDA represents earnings (or losses) before interest, income taxes, depreciation, and amortization. Adjusted EBITDA further eliminates the effect of stock-based compensation, acquisition related costs and restructuring and other charges.

Non-GAAP net income (loss), EBITDA, Adjusted EBITDA and service fee equivalent revenue are used by management, analysts, investors and other interested parties in evaluating our operating performance compared to that of other companies in our industry. The calculation of non-GAAP net income (loss) eliminates the effect of stock-based compensation, acquisition related costs and restructuring and other charges and EBITDA and adjusted EBITDA further eliminate the effect of financing, income taxes and the accounting effects of capital spending, which items may vary from different companies for reasons unrelated to overall operating performance. Service fee equivalent revenue allows client contracts with similar operational support models but different financial models to be combined as if all contracts were being operated on a service fee revenue basis.

PFSweb believes these non-GAAP measures provide useful information to both management and investors by focusing on certain operational metrics and excluding certain expenses in order to present its core operating performance and results. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the GAAP results in the attached tables.

Forward-Looking StatementsThe matters discussed herein consist of forward-looking information under the Private Securities Litigation Reform Act of 1995 and is subject to and involves risks and uncertainties, which could cause actual results to differ materially from the forward-looking information. PFSweb's Annual Report on Form 10-K for the year ended December 31, 2013 identifies certain factors that could cause actual results to differ materially from those projected in any forward looking statements made and investors are advised to review the Annual Report of the Company and the Risk Factors described therein. PFSweb undertakes no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future. There may be additional risks that we do not currently view as material or that are not presently known.

PFSweb, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (A)

(In Thousands, Except Share Data)

(Unaudited)

September 30,

December 31,

2014

2013

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

19,501

$

22,418

Restricted cash

202

130

Accounts receivable, net of allowance for doubtful accounts of $420 and $382 at September 30, 2014 and December 31, 2013, respectively

45,157

55,292

Inventories, net of reserves of $830 and $962 at September 30, 2014 and December 31, 2013, respectively

Common stock, $.001 par value; 35,000,000 shares authorized; 16,842,450 and 16,540,904 shares issued at September 30, 2014 and December 31, 2013, respectively; and 16,808,983 and 16,507,437 shares outstanding as of September 30, 2014 and December 31, 2013, respectively

17

17

Additional paid-in capital

127,653

124,522

Accumulated deficit

(92,030

)

(85,300

)

Accumulated other comprehensive income

1,040

1,811

Treasury stock at cost, 33,467 shares

(125

)

(125

)

Total shareholders' equity

36,555

40,925

Total liabilities and shareholders' equity

$

128,454

$

132,036

(A) The financial data above should be read in conjunction with the audited consolidated financial statements of PFSweb, Inc. included in its Form 10-K for the year ended December 31, 2013.

PFSweb, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations (A)

(In Thousands, Except Per Share Data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2014

2013

2014

2013

REVENUES:

Product revenue, net

$

17,340

$

21,495

$

57,182

$

69,660

Service fee revenue

31,411

23,908

86,393

78,708

Pass-thru revenue

8,344

8,150

24,792

26,511

Total revenues

57,095

53,553

168,367

174,879

COSTS OF REVENUES:

Cost of product revenue

16,397

20,221

53,952

65,215

Cost of service fee revenue

22,007

16,196

60,387

53,265

Cost of pass-thru revenue

8,344

8,150

24,792

26,511

Total costs of revenues

46,748

44,567

139,131

144,991

Gross profit

10,347

8,986

29,236

29,888

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

12,764

10,656

35,271

34,395

Income (loss) from operations

(2,417

)

(1,670

)

(6,035

)

(4,507

)

INTEREST EXPENSE (INCOME), NET

174

162

490

564

Income (loss) before income taxes

(2,591

)

(1,832

)

(6,525

)

(5,071

)

INCOME TAX PROVISION (BENEFIT)

(66

)

120

205

411

NET INCOME (LOSS)

$

(2,525

)

$

(1,952

)

$

(6,730

)

$

(5,482

)

NON-GAAP NET INCOME (LOSS)

$

(133

)

$

(1,342

)

$

(2,528

)

$

(1,742

)

NET INCOME (LOSS) PER SHARE:

Basic

$

(0.15

)

$

(0.12

)

$

(0.40

)

$

(0.38

)

Diluted

$

(0.15

)

$

(0.12

)

$

(0.40

)

$

(0.38

)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:

Basic

16,779

16,121

16,680

14,490

Diluted

16,779

16,121

16,680

14,490

EBITDA

$

464

$

767

$

2,614

$

3,026

ADJUSTED EBITDA

$

2,856

$

1,377

$

6,816

$

6,766

(A) The financial data above should be read in conjunction with the audited consolidated financial statements of PFSweb, Inc. included in its Form 10-K for the year ended December 31, 2013.

PFSweb, Inc. and Subsidiaries

Reconciliation of certain Non-GAAP Items to GAAP

(In Thousands, Except Per Share Data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2014

2013

2014

2013

NET INCOME (LOSS)

$

(2,525

)

$

(1,952

)

$

(6,730

)

$

(5,482

)

Income tax expense (benefit)

(66

)

120

205

411

Interest expense, net

174

162

490

564

Depreciation and amortization

2,881

2,437

8,649

7,533

EBITDA

$

464

$

767

$

2,614

$

3,026

Stock-based compensation

853

610

2,509

1,195

Acquisition related costs

1,366

-

1,520

-

Restructuring and other charges

173

-

173

2,545

ADJUSTED EBITDA

$

2,856

$

1,377

$

6,816

$

6,766

Three Months Ended

Nine Months Ended

September 30,

September 30,

2014

2013

2014

2013

NET INCOME (LOSS)

$

(2,525

)

$

(1,952

)

$

(6,730

)

$

(5,482

)

Stock-based compensation

853

610

2,509

1,195

Acquisition related costs

1,366

-

1,520

-

Restructuring and other charges

173

-

173

2,545

NON-GAAP NET INCOME (LOSS)

$

(133

)

$

(1,342

)

$

(2,528

)

$

(1,742

)

NET INCOME (LOSS) PER SHARE:

Basic

$

(0.15

)

$

(0.12

)

$

(0.40

)

$

(0.38

)

Diluted

$

(0.15

)

$

(0.12

)

$

(0.40

)

$

(0.38

)

NON-GAAP NET INCOME (LOSS) Per Share:

Basic

$

(0.01

)

$

(0.08

)

$

(0.15

)

$

(0.12

)

Diluted

$

(0.01

)

$

(0.08

)

$

(0.15

)

$

(0.12

)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2014

2013

2014

2013

TOTAL REVENUES

$

57,095

$

53,553

$

168,367

$

174,879

Pass-thru revenue

(8,344

)

(8,150

)

(24,792

)

(26,511

)

Cost of product revenue

(16,397

)

(20,221

)

(53,952

)

(65,215

)

SERVICE FEE EQUIVALENT REVENUE

$

32,354

$

25,182

$

89,623

$

83,153

PFSweb, Inc. and Subsidiaries

Unaudited Consolidating Statements of Operations

For the Three Months Ended September 30, 2014

(In Thousands)

PFSweb

Business &
Retail Connect

Eliminations

Consolidated

REVENUES:

Product revenue, net

$

-

$

17,340

$

-

$

17,340

Service fee revenue

28,362

3,049

-

31,411

Service fee revenue - affiliate

3,048

238

(3,286

)

-

Pass-thru revenue

8,344

-

-

8,344

Total revenues

39,754

20,627

(3,286

)

57,095

COSTS OF REVENUES:

Cost of product revenue

-

16,397

-

16,397

Cost of service fee revenue

21,972

3,145

(3,110

)

22,007

Cost of pass-thru revenue

8,344

-

-

8,344

Total costs of revenues

30,316

19,542

(3,110

)

46,748

Gross profit

9,438

1,085

(176

)

10,347

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

12,255

685

(176

)

12,764

Income (loss) from operations

(2,817

)

400

-

(2,417

)

INTEREST EXPENSE (INCOME), NET

36

138

-

174

Income (loss) before income taxes

(2,853

)

262

-

(2,591

)

INCOME TAX PROVISION (BENEFIT)

(209

)

143

-

(66

)

NET INCOME (LOSS)

$

(2,644

)

$

119

$

-

$

(2,525

)

NON-GAAP NET INCOME (LOSS)

$

(252

)

$

119

$

-

$

(133

)

EBITDA

$

22

$

442

$

-

$

464

ADJUSTED EBITDA

$

2,414

$

442

$

-

$

2,856

A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:

NET INCOME (LOSS)

$

(2,644

)

$

119

$

-

(2,525

)

Income tax expense (benefit)

(209

)

143

-

(66

)

Interest expense (income), net

36

138

-

174

Depreciation and amortization

2,839

42

-

2,881

EBITDA

$

22

$

442

$

-

$

464

Stock-based compensation

853

-

-

853

Acquisition related costs

1,366

-

-

1,366

Restructuring and other charges

173

-

-

173

ADJUSTED EBITDA

$

2,414

$

442

$

-

$

2,856

A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:

NET INCOME (LOSS)

$

(2,644

)

$

119

$

-

$

(2,525

)

Stock-based compensation

853

-

-

853

Acquisition related costs

1,366

-

-

1,366

Restructuring and other charges

173

-

-

173

NON-GAAP NET INCOME (LOSS)

$

(252

)

$

119

$

-

$

(133

)

Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships.

PFSweb, Inc. and Subsidiaries

Unaudited Consolidating Statements of Operations

For the Three Months Ended September 30, 2013

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

REVENUES:

Product revenue, net

$

-

$

21,495

$

-

$

21,495

Service fee revenue

22,123

1,785

-

23,908

Service fee revenue - affiliate

2,198

312

(2,510

)

-

Pass-thru revenue

8,150

-

-

8,150

Total revenues

32,471

23,592

(2,510

)

53,553

COSTS OF REVENUES:

Cost of product revenue

-

20,221

-

20,221

Cost of service fee revenue

16,634

1,862

(2,300

)

16,196

Cost of pass-thru revenue

8,150

-

-

8,150

Total costs of revenues

24,784

22,083

(2,300

)

44,567

Gross profit

7,687

1,509

(210

)

8,986

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

9,510

1,356

(210

)

10,656

Income (loss) from operations

(1,823

)

153

-

(1,670

)

INTEREST EXPENSE (INCOME), NET

11

151

-

162

Income (loss) before income taxes

(1,834

)

2

-

(1,832

)

INCOME TAX PROVISION (BENEFIT)

58

62

-

120

NET INCOME (LOSS)

$

(1,892

)

$

(60

)

$

-

$

(1,952

)

NON-GAAP NET INCOME (LOSS)

$

(1,282

)

$

(60

)

$

-

$

(1,342

)

EBITDA

$

576

$

191

$

-

$

767

ADJUSTED EBITDA

$

1,186

$

191

$

-

$

1,377

A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:

NET INCOME (LOSS)

$

(1,892

)

$

(60

)

$

-

(1,952

)

Income tax expense (benefit)

58

62

-

120

Interest expense (income), net

11

151

-

162

Depreciation and amortization

2,399

38

-

2,437

EBITDA

$

576

$

191

$

-

$

767

Stock-based compensation

610

-

-

610

ADJUSTED EBITDA

$

1,186

$

191

$

-

$

1,377

A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:

NET INCOME (LOSS)

$

(1,892

)

$

(60

)

$

-

$

(1,952

)

Stock-based compensation

610

-

-

610

NON-GAAP NET INCOME (LOSS)

$

(1,282

)

$

(60

)

$

-

$

(1,342

)

Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships.

PFSweb, Inc. and Subsidiaries

Unaudited Consolidating Statements of Operations

For the Nine Months Ended September 30, 2014

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

REVENUES:

Product revenue, net

$

-

$

57,182

$

-

$

57,182

Service fee revenue

76,939

9,454

-

86,393

Service fee revenue - affiliate

9,914

846

(10,760

)

-

Pass-thru revenue

24,792

-

24,792

Total revenues

111,645

67,482

(10,760

)

168,367

COSTS OF REVENUES:

Cost of product revenue

-

53,952

-

53,952

Cost of service fee revenue

60,446

9,854

(9,913

)

60,387

Cost of pass-thru revenue

24,792

-

-

24,792

Total costs of revenues

85,238

63,806

(9,913

)

139,131

Gross profit

26,407

3,676

(847

)

29,236

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

33,754

2,364

(847

)

35,271

Income (loss) from operations

(7,347

)

1,312

-

(6,035

)

INTEREST EXPENSE (INCOME), NET

68

422

-

490

Income (loss) before income taxes

(7,415

)

890

-

(6,525

)

INCOME TAX PROVISION (BENEFIT)

(128

)

333

-

205

NET INCOME (LOSS)

$

(7,287

)

$

557

$

-

$

(6,730

)

NON-GAAP NET INCOME (LOSS)

$

(3,085

)

$

557

$

-

$

(2,528

)

EBITDA

$

1,173

$

1,441

$

-

$

2,614

ADJUSTED EBITDA

$

5,375

$

1,441

$

-

$

6,816

A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:

NET INCOME (LOSS)

$

(7,287

)

$

557

$

-

(6,730

)

Income tax expense (benefit)

(128

)

333

-

205

Interest expense (income), net

68

422

-

490

Depreciation and amortization

8,520

129

-

8,649

EBITDA

$

1,173

$

1,441

$

-

$

2,614

Stock-based compensation

2,509

-

-

2,509

Acquisition related costs

1,520

-

-

1,520

Restructuring and other charges

173

-

-

173

ADJUSTED EBITDA

$

5,375

$

1,441

$

-

$

6,816

A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:

NET INCOME (LOSS)

$

(7,287

)

$

557

$

-

$

(6,730

)

Stock-based compensation

2,509

-

-

2,509

Acquisition related costs

1,520

-

-

1,520

Restructuring and other charges

173

-

-

173

NON-GAAP NET INCOME (LOSS)

$

(3,085

)

$

557

$

-

$

(2,528

)

Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships.

PFSweb, Inc. and Subsidiaries

Unaudited Consolidating Statements of Operations

For the Nine Months Ended September 30, 2013

(In Thousands)

Business &

PFSweb

Retail Connect

Eliminations

Consolidated

REVENUES:

Product revenue, net

$

-

$

69,660

$

-

$

69,660

Service fee revenue

73,868

4,840

-

78,708

Service fee revenue - affiliate

6,467

1,110

(7,577

)

-

Pass-thru revenue

26,511

-

-

26,511

Total revenues

106,846

75,610

(7,577

)

174,879

COSTS OF REVENUES:

Cost of product revenue

-

65,215

-

65,215

Cost of service fee revenue

54,815

5,161

(6,711

)

53,265

Cost of pass-thru revenue

26,511

-

-

26,511

Total costs of revenues

81,326

70,376

(6,711

)

144,991

Gross profit

25,520

5,234

(866

)

29,888

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

30,673

4,588

(866

)

34,395

Income (loss) from operations

(5,153

)

646

-

(4,507

)

INTEREST EXPENSE (INCOME), NET

113

451

-

564

Income (loss) before income taxes

(5,266

)

195

-

(5,071

)

INCOME TAX PROVISION (BENEFIT)

200

211

-

411

NET INCOME (LOSS)

$

(5,466

)

$

(16

)

$

-

$

(5,482

)

NON-GAAP NET INCOME (LOSS)

$

(1,726

)

$

(16

)

$

-

$

(1,742

)

EBITDA

$

2,264

$

762

$

-

$

3,026

ADJUSTED EBITDA

$

6,004

$

762

$

-

$

6,766

A reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows:

NET INCOME (LOSS)

$

(5,466

)

$

(16

)

$

-

(5,482

)

Income tax expense (benefit)

200

211

-

411

Interest expense (income), net

113

451

-

564

Depreciation and amortization

7,417

116

-

7,533

EBITDA

$

2,264

$

762

$

-

$

3,026

Stock-based compensation

1,195

-

-

1,195

Restructuring and other charges

2,545

-

-

2,545

ADJUSTED EBITDA

$

6,004

$

762

$

-

$

6,766

A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME (LOSS) follows:

NET INCOME (LOSS)

$

(5,466

)

$

(16

)

$

-

$

(5,482

)

Stock-based compensation

1,195

-

-

1,195

Restructuring and other charges

2,545

-

-

2,545

NON-GAAP NET INCOME (LOSS)

$

(1,726

)

$

(16

)

$

-

$

(1,742

)

Note: Business and Retail Connect includes our Supplies Distributors and PFSweb Retail Connect operations, which operate similar financial models on behalf of our client relationships.